Oil prices were steady on Thursday as investors waited for Middle East developments and more details on China’s stimulus plans. They also waited for the release of official US oil inventory data.
Brent crude futures were down 4 cents to $74.18 a barrel by 0648 GMT, while WTI crude futures were down 2 cents to $70.37.
Both indexes fell on Wednesday, closing at their lowest levels since Oct. 2 for the second day.
The indexes have fallen 6-7% so far this week after the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) cut their demand forecasts for 2024 and 2025.
As uncertainty over the Middle East conflict continues, prices have fallen as risk premiums have eased as fears that an Israeli retaliatory strike on Iran could disrupt oil supplies have eased.
Two things are expected now: First, China’s NPC (National People’s Congress) standing committee will reveal the details and size of the fiscal stimulus package it is believed to be coming.
Investors are awaiting more details on Beijing’s sweeping plans to revive its struggling economy, which it announced on Oct. 12.
China said on Thursday it would expand a “white list” of housing projects eligible for financing and increase bank loans for such developments to 4 trillion yuan ($562 billion), aiming to shore up its troubled real estate market.
Israel’s probable response to Iran’s latest attack is the second major focus for the market. It is likely to happen, but it is not known when. Both factors pose upside risks to crude prices.
Meanwhile, Iran is trying to contain an oil spill off Kharg Island. This appears to be unrelated to the Israel-Hamas war, but it is drawing attention to Iran’s oil export facilities.
In the US, crude oil and fuel stocks fell last week, according to market sources, contradicting expectations Wednesday of rising crude stocks from the American Petroleum Institute (API).
The sources, speaking on condition of anonymity, said crude oil stocks fell by 1.58 million barrels in the week ending October 11. Gasoline stocks fell by 5.93 million barrels and distillate stocks fell by 2.67 million barrels.
Analysts had estimated that crude oil stocks rose by an average of 1.8 million barrels in the week to October 11.
Signs of weak demand in the EIA’s weekly inventory report could put further downward pressure on oil prices.
The Energy Information Administration (EIA), the statistics arm of the US Department of Energy, will release its data at 15:00 GMT on Thursday.
The European Central Bank, which also supports oil prices, is likely to cut interest rates again on Thursday, the first consecutive rate cut in 13 years, as it focuses on protecting economic growth rather than curbing inflation in the euro zone.